in today's cover story, shock at the gas pump in the golden state. what a federal investigation could reveal about the price spike. donation dollars - how power players spend billions to get candidates elected. and, why money could rush into apple and netflix in today's trading session. plus, q&a for small business owners. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas.

good morning. it's tuesday, october 9th. i'm angela miles. in today's first look: there's a while lotta bracing goin' on. traders are awaiting earnings after the close from alcoa for a gauge on corporate america. plus, german chancellor angela merkel ventures to greece, where she will likely be met by a sea of angry people. yesterday in the u.s.: a stock slide on china. stocks and commodies all fell on continued concerns of a slowdown in the chinese economy. and in m&a, principal financial is said to be ready to buy a chilean pension managing company for $1.5 billion. mark sebastian of option pit mentoring joins us now. will some eyes be on europe today mark? > > i think europe's interesting. i think everybody is waiting for the spanish regional elections on october 21st to see if after that they ask for the bailout. we've seen some real strength in the euro.

i'm not sure that can last if spain asks for a bailout, and i think we're running into some technical highs on the currency. expect to see the euro drop a little bit here. > > here in the united states a lot of people are concerned about alcoa's earnings, which come out after the close and kick off the earnings parade. > > earnings cycles the last couple of cycles have been "expect the worst and get mediocre," which ends up being bullish. remember, this is a market of expectations, not of results. we're actually seeing a lot of call buying in alcoa ahead of the earnings, so don't be shocked if we get a little bit of a pop tomorrow, and that could really set a precedent for the entire earnings season. > > we also saw some unusual action happening in netflix yesterday as well as apple, apple selling off and netflix becoming a momentum player again. > > netflix got a nice upgrade. it's really moved higher, it's always been a volatile stock. i think it's a trader stock. i'm not sure if it's an investor stock. apple getting smoked on the foxconn problems - and those are real problems. it will be interesting to see if they get that in line. the stock is now off about 10% from its

highs. you've got to think that - there were a lot of bankers off yesterday, and there are going to be some guys stepping in looking to buy the stock below $650 this morning. > > good to have you on the show. that's interesting. that's mark sebastian of option pit mentoring. in today's cover story, gas prices have never shot higher than they have in california within the last week. in some places, the price is above five dollars a gallon. it's led the governor to take emergency action and california's senior senator to call for a federal investigation. in california, you might hesitate once you grab the handle of the gas pump. california often has some of the highest gasoline prices in the u.s. but this is off the charts. the nationwide average is $3.81 a gallon, but in california, it leaped to an average of $4.65. in san jose, it's $4.65 for regular, $4.85 for premium. but in la, regular is nudging $5 and premium is $5.29 a gallon. enough to make

you put the handle back without filling up. california governor jerry brown ordered state regulators to allow refineries to produce more gasoline - even switching to winter blend, which can be made more easily than the less-polluting summer blend. in a letter to regulators, brown said, "if this situation continues, it may cause unacceptable price impacts for consumers and small businesses, significant economic disruption, and serious harm to public safety and welfare." oil analysts say the spike in gas prices began after a fire at a chevron refinery in the bay area and two recent shutdowns at refineries near los angeles. but senator dianne feinstein wants the federal trade commission to investigate possible price manipulation and collusion, saying, "california's consumers are all too familiar with energy price spikes which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and

manipulative trading activity." analysts say the gasoline situation in california is pretty much confined to that state. it is largely cut off from the pipeline network across much of the nation and vulnerable to disruptions in supply and price. nationwide, motorists are paying 35 cents more per gallon than a year ago. oil trader phil flynn of price futures group and a fox business news contributor joins us from cme group this morning. good morning phil. what's your prediction on oil prices during the next few weeks? > > down, down, down. gas prices down as well. i think our nightmare is really coming to an end. to be honest with you, you're talking about that as a national average. there's places in the country where prices have actually fallen close to 2-15¢ a gallon, but because of the issues in california, it's been keeping the overall market higher than it normally would be. > > would you buy any oil stocks? > > i think we would. the refineries are going to be very very hot here for the next couple months. i think you're going to see the refining

margins stay strong. but, you've got to remember that refining is a boom and bust industry. what may happen at some point in the future, that those margins are going to come down. if you see increased tensions in the middle east, those refining margins could go away very quickly. but, barring that, i would say for the next year, refining margins are going to stay strong. > > thanks for the update. phil flynn. bp is selling a texas city refinery to marathon petroleum. the deal will be worth around 2.5 billion dollars. this brings bp one step closer to its goal to sell off some assets in an effort to cover costs of the deepwater horizon spill. bp plans to sell off 38 billion dollars in assets by next year. greece is bracing for a big day. german chancellor angela merkel is paying a visit to athens. two of the largest unions there are calling for massive walkouts in the afternoon so workers can protest her visit. however, rallies will be banned today. emotions have been boiling over as greek citizens deal with layoffs,

pension cuts and other austerity measures merkel and others in the e.u. are demanding. greece needs severe cuts in order to get another bailout to keep operating. stay tuned. as mentioned earlier, there have been more reports of friction at foxconn. foxconn is denying allegations of worker strikes following reports that thousands of employees struck friday. last week, the alleged strike stopped production on the latest iphone 5 for several hours. workers were said to be retaliating against harsh working conditions. foxconn denies the reports but did say there were "disputes" in some factories early last week. u.s. companies are being warned to avoid using some tech equipment from china. a house intellegence committee says two leading chinese tech firms pose a national security threat. the panel concludes in a report zte corp and huawei technologies should not be trusted with access to computer networks that support everything from power grids to the u.s. finanical system.

"it could be a router who turns on in the middle of the night and starts sending back large data packs and it happens to be sent back to china." the recommendations followed a year-long investigation. general motors is revving up employment. (broll) the carmaker plans to hire 15- hundred high tech employees for a new information center just outside of detroit. and 500 at center in austin texas. the i-t innovation centers are intended to help the car company improve performance and drive down operation costs. move over jewelry and hand bags. toyota is proving to be popular on hsn, the channel formerly known as the home shopping network. for the first time, hsn pitched a car company. according to reports, toyota used 3 one-hour blocks to explain its hybrid lineup to an audience that is mostly female. the cars weren't actually sold on hsn because of dealer franchise laws. walmart and american express are

offering shoppers a pre-paid plan. the two companies will release a pre-paid debit card called "bluebird" next week. the card has no minimum balance requirment or fees attached. am ex says it is an option for customers who have been "poorly served by traditional banking products." on the trading floor, there's "chatter" more mergers and aqusitions may be in the works. "i think it's really the start of maybe a wave over the next 3, 6, 9 months where we are going to see a lot of activity and a lot of m&a activity in the marketplace." that was scott bauer of trading advantage. he tells us unusual activity is picking up in the options market. implied volatility is on the rise in stocks such as bmc software and lexmark. according to reports, 3 companies are said to be negotaiting to buy ancestery.com, also perking up the rumor mill. the huge amount of cash on the sidelines could be used for corporations to gobble up smaller companies.

the potential new chairman of cracker barrel is over a barrel because of possible resume padding. cracker barrel's recently designated chairman james bradford is being questioned by biglari holdings, the company that owns the restaurant chain. bradford claims to have been the head of an "nyse-listed company" for seven years, a fact biglari says is not true. chicago and san antonio will be the first cities where vending machines will display calories on soda. coke, pepsi and dr. pepper are rolling out the new machines. it's a premptive move. proposed regulations could require all restaunrants and vending machines to post calorie information as early as next year. critics have been raising concerns about sugary drinks and fatty foods. still to come, how to be a go- getter in small business. a popular columnist tells us how to take the reigns on launching a start up. but first, following the money

trail. who is spending billions to get their candidate elected? bill moller uncovers the shocking truth, next.

ñçbñ never look a howler monkey in the eye. we built the entire library out of recycled bottles. fried ants are delicious. really. that was a confidence builder. my students actually ended up teaching me. so i learned this dance, let me show you this dance.

(foreign language) the classroom was more of a class-tent. you think managing a sales team is tough... try working with five different villages. my alarm clock was a rooster. beans for breakfast, beans for lunch, beans for dinner. we ate a lot of beans. i learned a third language. my seatmate on the bus was a goat. always include the village elders, always. my morning commute was by canoe. after two months i was ready to quit, but after two years, i didn't want to leave. i didn't know i had it in me. turn two years of service into a lifetime of experience. to all the peace corps volunteers past, present, and future, thank you for your service to your country and the world. it may be constitutional, but even those who agree with the supreme court's citizens united ruling that created super pacs admit our government is awash in cash. money buys influence, but it also may buy government itself. this is the unambiguous

conclusion you reach in reading the book "billionaires & ballot bandits: how to steal an election in 9 easy steps." investigative reporter greg palast wrote it. he is a new york times-bestselling author and also works for the bbc and britain's the observer. what is going on is happening behind this very thin veneer of democracy, but as i read your book i get the sense that it really is a gross subversion of democracy. > > yes. we have to think about who these billionaires are. since we had citizens united, which created the so-called "corporate citizen," we've ended up with things like a million- dollar donation to the romney pac, restore our future - and i looked into it, by a company called f8 llc. > > what's that? > > i tried to look up, they have sales of $8,000 a year, which meant that their $1 million donation was pretty generous. also, the principal, a guy named diego, seems to exist only in a video game, "grand theft auto." he's an assassin. but under citizens

united, too bad. > > you don't need to know who is the name behind the money. you say you're non-partisan, but you clearly accuse the supporters of and the operatives within the republican party of really the key players in this game. > > well, right now 37 billionaires are behind romney. but if you look in the book, i do a story about someone in chicago named penny pritzker, penny from heaven, who was fined $400 million by the federal government for rampaging through the south side of chicago with predatory loan practices. they closed her bank superior. if it wasn't for that rogue banker, barak obama would still be in that swamp called the illinois state senate. > > you also talk about bill clinton. he had dealings with the koch brothers too. > > not only dealings. we wouldn't have had bill clinton without the koch brothers. people talk about the koch

brothers as if they're republicans. right now they've invested - they don't make donations, they make investments - in the romney campaign. and they gave $150,000 illegally to bob dole. he got caught, he had to give it back. but then they gave $100,000 to create the democratic leadership council, which is the vehicle that this guy from arkansas rode right into the white house. > > very quickly, why aren't media reporters like you digging these facts up? > > i think they don't have my hat, and even more important is that they don't have the producers that do the old style investigative reporting. i work for bbc. i'm on the top of the nightly news there, the front page of the big paper the guardian. people really don't want to know in america that their elections have been bought up. the subtitle of "billionaires & ballot bandits" is "how to steal an election in 9 easy steps," and, frankly, they don't want to hear that one of the things these guys buy is making sure your ballot doesn't get counted. > > greg palast, thank you so much. > > you're very welcome.

thank you bill. you can find more of that fascinating interview on our website at firstbusinessnews.com. still ahead, a popular small business pro will be here answering your questions. keep it here.

is now the time to go into business for yourself? that's just one of the questions we are answering this morning. usa today columnist steve strauss, who doles out advice to small owners, is here. good morning

and thanks for coming on our show. > > thank you. how are you this morning angela? > > i'm having a great morning. what's the most popular question you get from small business owners? > > i guess the question i get most often has to do with social media. "how do we make it pay off for our small business?" because the thing is, people can spend too much time on social media, or, on the other hand, not use it at all. and what i tell people is, follow your customers. if they're on facebook, then you need to be on facebook. but you don't need to be on every social media site as a small-business owner. you don't have to do to pinterest and twitter and facebook. figure out one, master that one, and i think that's the way to go. > > for someone thinking of starting up a company, what businesses are thriving now? > > service businesses are thriving a lot, as our online businesses. if you were to look at one segment of our economy that grows at about a 10% clip a year, would you know what it is? it actually turns out to be e-business. so one of the best things you can do is actually create either your own online business or have some kind of

online component to your business, and what you're going to find is, because everyone's gravitating ever more online, that's a growing segment of the economy, you can take advantage of that by going online yourself. > > what about that person who is entertaining striking out on their own but is scared? > > what i love is that this actually is a great time to be in business. yes, there are some businesses that are struggling, but we just saw that the unemployment rate dipped to 7.8%. why is that? there are 28 million businesses in this country. 99% of those are small businesses, meaning 1-, 5-, 10-, 20-employee businesses. so if the unemployment rate is coming down, what does that mean? it means small business is going up and is growing. so it's actually a great time to start and run a business. my dad owned some carpet stores in southern california when i grew up, and the economy went up, and the economy went down, and his business went up, and his

business went down. but the truth is, these days, no one has to be dictated by your own local economy. you can do business all over by being online. and there are so many more tools available that allow you to run your business. so, my dad ran his business by himself. if he didn't know something, he didn't know something. today what would you do? you would go online. you would go to a score counselor, you would find some help. it really is an amazing time. i don't mean to sound pollyannaish, but to me this is an amazing time to be in business. > > thank you for being here. that was steve strauss, columnist for usa today. from small biz to really big biz. chart talk on chevron is coming your way next!

o' we're getting a view on another oil stock on the show with matt shapiro, he's president of mws capital. good morning. you are taking a look at chevron. what do you see that you like in the

charts here? > > one thing i like about chevron is, of course, it's at all-time highs, angie - $117. but don't look at that number and be dissuaded from taking a look at the stock, because its p/e is 9, and it pays over 3% dividend. even with oil coming down, you'll notice that the stock has been going up. > > with a return of around 28%. but that makes me wonder if the run is over matt? > > i don't think it is. there's a lot of analysts that are bearish on supermajors like chevron, and they're noting this disparity between the stock price and the price of oil that has, of course, come down a little bit from $100. but, i think the oil stocks actually lead oil prices, and so many people out there, including my clients, they want exposure to oil, they want to be in these big solid blue-chip stocks, and a company like chevron has an excellent balance sheet, excellent dividend, and it has

a lot of oil reserves and production. so it's really one of the best supermajors to buy if you're looking long-term. > > is it a buy and a hold? > > absolutely. i was fortunate for my clients we bought it around $100 earlier this year. i have owned it also for many years. but you know, i would still be buying it now, and especially if oil comes down any more, and on the production report this morning, if the stock comes down a little bit more. so i really like it long- term. > > we will be watching. that's matt shapiro, president of mws capital. thank you matt. > > you're welcome. that closes out our day. there's so much more happening on our show tomorrow. the director of the documentary "as goes janesville" joins us. he'll have a behind-the-scenes look at the wisconsin town that has gone from gm bust to bailout. from all of us at first business, have a great tuesday!

. president barack obama wrapped up his final visit to the bay area when he spoke to more than 10,000 people who attended his speech last night. a woman brutally murdered in her home. report her penn state assistant coach jerry sandusky

had a statement he released from jail. and sheriff ross mirkarimi learns his fate as the board of supervisors get ready to vote on whether he keeps his job. it is all ahead right here on ktvu channel 2 morning news. good morning thank you for joining us this tuesday morning october 9th, i wonder what the weather will be like. steve paulson knows exactly how it will be. that is the key, it looks like it will stay right off the key, inland temperatures partly cool, here is sal. traffic is moving well around the bay area, as a matter of fact we are looking at the traffic that looks good here on highway 4 coming to the willow pass grade and